Abstract
Unpaid credit card debt can be problematic; people should avoid it where possible. Unlike prior studies, this article examines the relative strength of the association of financial literacy, attitude toward balancing spending and savings, and financial satisfaction with credit card debt- taking behavior by analyzing the 2016 wave of the Household, Income and Labor Dynamics in Australia (HILDA) Survey. We find that higher financial literacy is associated with less credit card debt. However, incorporating the other factors reduces this relationship. Our results advise policy-makers to include components in the financial literacy curricula that encourage savings attitude to reduce problematic debt-taking.
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